The Mall is Dead. Long Live Instagram!

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> Hey guys. This is a redux of a piece I did on my personal blog earlier this year. Instagram is a real platform, with a real audience, and real challenges. Dash Hudson provides a solution to creators and brands looking to create native advertising on Instagram and provide Instagram ROI for marketing dollars. I’ve seen things, and come to learn a lot about the social dynamics, economics, and opportunities on this fascinating platform. Here are some learnings from a half year of hard scrolling.

Growth: From 0 to 300m, Real Quick

When it debuted in 2010, Instagram was the perfect offspring of social network veterans Facebook and Twitter, a place where users could upload the photo that was too good for Facebook, while embracing the minimalist manifesto of Twitter. No albums or diatribes, just a quick description, and a photo filtered to perfection. An almost-immediate global success, Instagram took half the time of Twitter and two years less than Facebook to gain 150 million monthly active users. 53% of 18–29 year olds in the US now use Instagram and it is the social network that boasts the highest engagement among teens.

A picture is worth an exponentially compounding growth curve, apparently.

The follower / following relationship on Instagram has enabled those of social influence (celebs, athletes, models, and the uber-stylish) to build large, organic one to many audiences. Those audiences engage around photographs that convey a highly desirable lifestyle. Brands, busily marketing to fans through twitter accounts and Facebook pages, have taken notice of Instagram’s influence. According to L2, 92% of prestige brands have an Instagram account, with 63% of these brands linking to their accounts from their official websites. We estimate that brands are spending upwards of $1 billion per year on sponsored Instagram posts (tags and product placements). It is clear that Instagram is not just a photo sharing app, but a place where brands and influencers can reach engaged consumers, build brand awareness, and successfully promote products.

A Killer Audience: Enter the Kardashians

Instagram is so much more than just a collection of cool kids aiming to hit that seemingly unreachable 10,000 followers. There is an echelon of users who wield massive amounts of influence. Instagram’s most influential users include Kim Kardashian (and the rest of the Kardashian/Jenner brood), model Cara Delevingne with her quirky pictures and quotes, and pop star Rihanna with her risqué, and at times Instagram-censored, shots. What these celebrities have in common is that they have a lot of followers (Kim K has 25.1 million) and a lot of influence. The visual focus of Instagram has been a boon for the genetically blessed. Top model mega babes like Rosie Huntington and Candice Swanepoel blend images of the catwalk with behind the scenes and sunny vacas to deliver an attractive, and visceral experience to dedicated followers.

Apart from the Instagram A-listers, there is an entire world of the ‘famous on Instagram’ that occupy a different level of the hierarchy. While these people may not walk red carpets, their stars can rise quickly and burn brightly. In the Instagram era, anyone who fancies themselves a photographer, style guru, or model can become one. For example, relatively unknown fitness model Jen Selter amassed 5 million followers by posting beautiful, athletic shots featuring the fitness routines that keep her assets in shape. Models, like Guess girl Simone Holtznagel, who was found through Instagram by Guess founder Paul Marciano, have been discovered because of their profiles. Refinery29 and Nylon regularly feature the hottest new faces from Instagram in their pages. YouTube’s young generation of stars, such as Acacia Brinley and Amanda Steele, have seamlessly transitioned their massive influence from video to Instagram, and make up a fast-rising portion of the ‘non-celebrity’ influencers. In fact, many of these stars are bigger and wield more power than do ‘traditional’ celebrities. Some command as much as $25k per Instagram post and $50k per YouTube integration. Dash Hudson helps you to find and engage the right talent for your brand, and to build campaigns that get measurable results. Get your popcorn ready.

Instant Brands: Swimwear and Beauty for the Win

If you spend any time scrolling (or trolling, depending on your ilk), you have seen tags and promotions for brands building almost exclusively through the photo sharing service’s massive distribution channel. It’s no surprise that highly visual products work well on Instagram, and young brands are benefiting. Swimwear brands Triangl Swimwear, and Sahara Ray Swim have grown quickly by distributing product to the world’s best, and most liked, beach bodies. Internet beauty brand Glossier, headed by the magnetic Emily Weiss, has leveraged its connections with the fashion elite to market its products through Instagram. Retailers Intermix and Revolve seamlessly blend Instagram user generated content with editorialized promotion to great effect.

Visual products, from fashion to beauty, can grow rapidly by placing their products in the right hands, and on the right bodies and faces, of Instagram’s influencers.

Real Problems: OMG Where Did You Get Those SHOES?

As Instagram and its community of creators matured, the volume and quality of lifestyle and product imagery dramatically improved. Suddenly, the mindset of audiences began to move from pure engagement to expressed intent around images of coveted products. The ‘like’ is a powerful mechanism in social and it has become apparent from user engagement and photo comments that it often implies direct intent to purchase. The addition of tagging, which allows users to tag the brands they are using, has further amplified this.

*Here’s the rub. Instagram has wisely protected the sanctity of its photo driven newsfeed by barring live links in photos or comments. For consumers and brands alike, there is a love / hate relationship with the lack of links. It has, until now, made shopping complicated, and ROI measurement impossible. Instagram will for the first time this year, allow brands to inject ‘carousels’ ads into newsfeeds. But there is no solution that enables brands to connect with influencers to create beautiful, organic campaigns that convert.

Real Solutions: The First Instagram ROI for Influencer Content

At Dash Hudson, our team has narrowed in on blending the compelling, casual lifestyle content so prevalent on Instagram with a marketplace of over 3,000 brands. By layering in tools and proprietary technology, we enable influencers and brands to connect and create content that, when shared to Instagram feeds, is instantly shoppable. Creators upload a photo to the Dash Hudson app, tag the brands they are wearing, and share the image to their Instgram feed with a prompt to see the products on Dash Hudson. When a follower likes this photo and then installs the app, the first thing they see is the shoppable products, and they can check out in just a few taps. For each subsequent piece of Dash Hudson powered content they like, they are delivered directly from Instagram to the shoppable products in Dash Hudson. Overall, this enables a full funnel of tracking from engagement to sales. Yes, Instagram ROI for native content. We have seen conversion rates (to purchase) of as high as 1%, approaching best in class for mobile. We continue to build out new tools that will enable more creators and brands to be successful.

What’s Next?

The crux of the matter is that there is a problem that is begging to be solved. Instagram’s new clickable ad unit certainly goes part of the way to helping large brands drive traffic, but the power of Instagram truly rests with its creators. For brands, there is a clear opportunity to generate and leverage Instagram engagement to build community and drive meaningful sales through native content. Especially prescient is the need for brands to connect with teenagers, 76% of whom now use the platform.

For this new generation of shoppers, Instagram is their stage, their glossy mag, and their shopping mall.

What’s next in the world of Instagram shopping is wholly dependent on the creativity and commitment of innovators, agencies and brands that see Instagram as the next frontier of commerce.

If you are one of them, I would love to hear from you.

Email me directly at thomas@dashhudson.com or go ahead and learn more about how we can help.

PS: If you don’t already have Dash Hudson, please try it out and let me know what you think: Dash Hudson for iPhone

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Dash Hudson

The world’s most discerning brands and publishers use Dash Hudson to create and share photos and videos that people care about. Our visual intelligence platform provides a one-stop solution to predict performance, distribute, measure, and enhance engagement across all of your visual marketing channels.